Medicare Part D

What is Medicare Part D?

Medicare Part D is comprised of insurance plans sold by private insurance companies contracted with Medicare to help cover the costs of prescription drugs. Part D coverage can be found in stand-alone plans purchased separately from a Medicare supplement or Medigap plan, and often comes included within a Medicare Advantage or Part C plan.

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What Does Part D Cover?

All Prescription Drug Plans (PDP) must cover a broad variety of prescription drugs, including most drugs in certain protected classes, such as drugs used to treat cancer or HIV/AIDs. Each plan will publish a list of the various prescriptions covered by that plan called a formulary.  Formularies are then broken down into tiers which are used to classify the various prescription drugs covered by the plan.  Most plans have at least four tiers which are used to determine your portion of the drug cost. For example, a drug in a lower tier will generally cost you less than a drug in a higher tier.

How Does Part D Work?

Medicare prescription drug coverage is an optional benefit offered to everyone with Medicare. Even if you don’t use prescription drugs now, you should consider joining a Medicare drug plan.

If you decide not to join a Medicare drug plan when you’re first eligible, and you don’t have other creditable prescription drug coverage or get Extra Help, you’ll likely pay a late enrollment penalty if you join a plan later.

Generally, you’ll pay this penalty for as long as you have Medicare  prescription drug coverage. There are two ways to get Medicare Part D prescription drug coverage:

  1. Medicare Prescription Drug Plans (PDP). These are stand-alone plans designed to add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) plans, and Medicare Medical Savings Account (MSA) plans. You must have Part A and/or Part B to join a Medicare Prescription Drug Plan.
  2. Medicare Advantage Plans or other Medicare health plans that offer Medicare prescription drug coverage. You get all of your Part A, Part B, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are often known as MAPD plans.

Remember, you must have Part A and Part B to join a Medicare Advantage Plan, and not all of these plans offer drug coverage.

In each case, you must also live in the service area of the Medicare drug plan you want to join.